17th Jul 2019 17:27
(Alliance News) - Volga Gas PLC on Wednesday said it will lower its production rate guidance due to high rates of water influx in VM Number 2 well and high level of gas and water contact in VM Number 3 well.
The wells are in the company's Vostochny Makarovskoye field located in the Volga region of Russia.
The company said guidance for production rates beyond September will be reduced to 4,400 barrels of oil equivalent per day from current 5,900 boepd. It added that current production rates on existing wells were in line with management plans.
Volga Gas plans to review remaining reserves in the Vostochny Makarovskoye field and adjusted in accordance with the latest production estimates.
"Whilst the scale of this reduction is yet to be determined, on the basis of the reserves previously estimated in the VM Number 3 block, our preliminary analysis indicates it would be in the order of approximately 20% of the total group's proved reserves as at January 1," Volga said.
Andrey Zozulya, chief executive officer of Volga Gas, said: "While disappointed by these results, production from the VM field continues as expected. Management is working hard to optimise the recovery of gas and condensate from the reservoir and is actively seeking opportunities to build sources of additional alternative production."
Shares in Volga Gas closed at 62.50 pence each on Wednesday, down 18%.
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